Layoffs Surge to Highest Level Since 2020

Newsweek

2 days ago

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
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Job cuts have soared to their highest midyear total since the COVID-19 pandemic, fueled by federal workforce reductions and economic uncertainty.
According to a new report by outplacement firm Challenger, Gray & Christmas, so far in 2025, companies have announced 744,308 job cuts—the most at this point in the year since 2020, when over 1.5 million cuts were reported as the coronavirus pandemic took a firm hold on the U.S. Aside from 2020, it's the highest midyear total in 16 years, when 896,675 jobs were cut in the first half of 2009.
Federal agencies have been hit especially hard this year due to cost-cutting efforts led by the Trump administration's Department of Government Efficiency (DOGE). Other sectors with major job losses include retail, tech, and nonprofits.
Why It Matters
Recent polls have shown voters are increasingly pessimistic about the outlook for the economy, seeing higher grocery prices and a recession ahead. However, in recent months, job growth has increased, even sometimes unexpectedly. U.S. employers posted 7.8 million vacancies in May, the Labor Department reported Tuesday, up from 7.4 million in April and the highest November's 8 million, when former President Joe Biden was still in the White House.
Stock image/file photo: A worker with their things packed in a box.
Stock image/file photo: A worker with their things packed in a box.
GETTY
What To Know
The government has shed more jobs than any other this year, with 288,628 positions eliminated so far, primarily from federal agencies, though some are still challenged in courts.
Among private industries, retail has suffered the steepest losses, with 79,865 jobs cut in the first half of 2025—a 255 percent increase from the same period last year.
The technology sector is also experiencing a slowdown. Tech companies have announced 76,214 layoffs in 2025, up 27 percent from last year. The report attributes the downturn to "disruptions driven by the advancement of AI and uncertainty around immigration and visa policies."
Nonprofits have not been spared. Facing shrinking federal support and rising operational costs, the sector has cut 16,930 jobs so far in 2025—a 407 percent increase from the same period in 2024. These losses are especially concentrated among direct service organizations and those that depend on federal contracts.
The media industry is faring a little better. Job cuts in media fell 46 percent compared to the first five months of 2024, with 4,752 announced so far. News organizations, including print, broadcast, and digital, have cut 1,139 jobs this year, down from 2,397 in the first six months last year.
Where Are Layoffs Happening?
The East has borne the brunt of job losses, largely due to federal layoffs in Washington, D.C. Job cuts surged 222 percent year over year, with Washington, D.C. alone accounting for 289,586. New Jersey and New York also saw significant increases, while states like Connecticut and Vermont saw steep declines.
The South experienced a 31 percent increase in job cuts, led by sharp rises in Georgia, Florida, and Alabama. The Midwest posted a modest 4.1 percent uptick overall, though individual states like Ohio and Nebraska saw significant spikes.
In the West, layoffs remained relatively flat, though California led with 100,084 cuts—up 41 percent from 2024.
What's Driving the Cuts?
Beyond DOGE, market and economic conditions are cited as the second-most common reason for layoffs, totaling 154,126 so far this year, Challenger reported. Store closures, restructuring, bankruptcies, and technological updates—including automation and AI—are also major contributors.
What People Are Saying
Andrew Challenger, senior vice president and labor expert for Challenger, Gray & Christmas: "The bulk of companies cited economic conditions last month. We saw some DOGE activity and have tracked over 2,000 jobs directly attributed to tariffs this year, but for the most part it was a quiet June."
Matt Sable, co-head of J.P. Morgan Commercial Banking, previously told Newsweek: "Business leaders are managing through a lot of unknowns—from policy uncertainty to market volatility and beyond—and are thoughtfully recalibrating their strategic plans as they seek more clarity about the future.
"Business leaders are most concerned about uncertain economic conditions heading into the second half of the year. Other key factors like tariffs, policy uncertainty and geopolitical events are top of mind as well. While the near-term may seem uncertain, they're operating with a long-term view, focusing on what they can control to run and grow their businesses."
What Happens Next
While the news about layoffs isn't exactly encouraging news for U.S. workers, the number of announced planned hires has increased by 19 percent year-over-year.
"Hiring announcements in 2025 suggest a cautious but stabilizing labor market. While companies are clearly adding workers at a higher rate than in 2024, the restraint shown relative to previous years indicates continued uncertainty around costs, automation, and the broader economic outlook. Without a strong economic driver, hiring may remain measured through the rest of the year," Challenger said.